False Optimism Ahead Of A Double Dip Recession
Hey Jessrecessionists
2020 was quite the year for global GDP which took its first major hit in years due to the rampant pandemic and global lockdown rules in each country. Its effects were most evident in the March lows of the market, but governments stepped in along with central banks to provide liquidity and stimulus and bring the markets back from the brink.
Lockdowns began to ease and we saw economic activity turn be it hampered. Naturally going from full steam ahead, to a screeching halt and starting up again was going to leave some people left behind and even during the recovery people continue to lose employment and velocity of money slows down.
As we moved back into work mode for some and others adapted to working from home that economic activity helped bring back some positivity and we had a recovery, it started with V shape, then U shape, then L shaped and now we calling it K shaped lol, when they break out these random naming conventions you know its pretty much anyone's guess.
Not out of the woods yet
Sadly the virus continues to plague us, countries are facing 2nd, 3rd, 4th waves and new lockdowns are rolling out, eliminating what little growth we had going for us since the March lows.
We've limped on and since humans are creatures of habit, we often think the world revolves around us. Many people are super positive that a change in the way we measure dates, as in the new year is going to have some effect on the way the world works.
Sadly that to me is only misguided optimism, there's nothing magical about the new year. I have no issue with being positive, overall I am pretty positive that we're moving in the right direction over a longer time frame, it will just take some while to play out and some pain along the way.
Dip it low
I think it's pretty evident that we're headed for our second downturn in what is called a double-dip recession.
A double-dip is when a recession is followed by a short-lived recovery and another recession. Double-dip recessions can be caused due to a variety of reasons, and involve prolonged unemployment and low GDP.
We don't know how governments are going to react but one thing is for sure, they are more reactive than proactive, they're not planning for the future, they're only interested in handling the present as it comes.
Once the double-dip recession is confirmed I am sure they're going to spring into action once again, throwing money at the problem and trying to get growth back on track at any cost.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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